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M/s. Triveni Engg & Industries Ltd. Versus CCE, Meerut-I

2015 (7) TMI 546 - CESTAT NEW DELHI

Eligibility for cenvat credit - Capital goods - Whether common registration under Rule 9 of Central Excise Rules, 2002 can be issued to sugar mill and its co-generation power plant which are separated by a public road - Held that:- Sugar mills and co-generation power plant separated by a public road are connected through overhead conveyer by which bagasse is generated in the sugar mill is transferred to co-generation power plant where it is used in the boiler for generation of steam which is use .....

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factory (where processes are interlinked), but are segregated by public road, canal, or railway-line.

When sugar mill and co-generation power plant are connected through overhead conveyer by which bagasse generated in the sugar mill is transferred to co-generation power plant where it is used in the boiler for generation of electricity and the electricity generated in the co-generation power plant is used in the sugar mill for its operation and only surplus electricity is sold to the .....

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e reasons have been given by the Commissioner (Appeals) for upholding denial of common registration for sugar mill and co-generation power plants are absurd. - Decided in favour of assessee. - Appeal No. E/1025/2007, E/2912/2007, E/3073/2009, E/2857/2010, E/3592/2010, Appeal No. E/3461/2012, Appeal No. E/3462/2012, Appeal No. E/3891/2012, Appeal No. E/57572/2013, Appeal No. E/53044-53045/2014, Appeal No. E/53047/2014 - Final Order No. 51801-51812/2015 - Dated:- 26-5-2015 - Hon ble Mr. Rakesh Kum .....

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t, there is co-generation power plant which generated power by burning bagasse generated by sugar mill in the course of crushing of sugar cane. As is clear from the photograph placed on record, the co-generation power plant is connected through overhead conveyer by which bagasse is transferred to co-generation power plant which is used for generation of electricity. The electricity generated is used in the sugar mill for its entire operation and surplus electricity was being sold to the state el .....

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f appeals is whether common central excise registration could be granted under Rule 9 of Central Excise Rules, 2002 to the sugar mill as well as co-generation power plant. The appellant applied for common central excise registration claiming the co-generation plant is part of the factory premises (sugar mill). The Assistant Commissioner rejected the request of the appellant for common registration and this order of the Assistant Commissioner was upheld by the Commissioner (Appeals) vide Order-in .....

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ion power plant, also observed that the raw materials are not common of the two units, because in case of sugar unit the main raw material is sugar cane which has nothing to do with generation of power plant. Against this order of the Commissioner (Appeals), the appeal no.E/2912/07 has been filed. 1.4 Since the appellants request for common central excise registration for sugar mill and co-generation power plant was rejected, the department was of the view that the capital goods meant for co-ge .....

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.2007 confirmed the capital goods credit demand of ₹ 2,06,86,247/- for the period January, 2004 to October, 2006 alongwith interest on it under section 11AB and besides this, imposed penalty of equal amount under Rule 15(2) of Cenvat Credit Rules, 2004. The appeals. E/3073/09,2857/10,3592/10,3461,3462/12, 3891/12, 57572/13, 53044, 53045 and 53047/14 have been filed against the order of the Commissioner (Appeals) upholding cenvat credit the demand in respect of capital goods and inputs serv .....

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, the learned Counsels representing the appellant, pleaded that the cenvat credit would be admissible in respect of capital goods which are used in the factory of the manufacturer receiving them for the manufacture of final products, that co-generation power plant in which the capital goods, in question, have been used and in respect of which the services of installation, erection and commissioning of plant and machinery, and repair and maintenance of plant covered by rule 6 (5) of cenvat Credit .....

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cesses are interlinked), but are segregated by public road, canal, or railway-line, that in the supplementary instructions examples have been given where two more premises treated as part of the same factory such as, (a) interlinked process when the products manufactured/produced in one premises are substantially used in other premises for manufacture of final products, (b) large number of raw materials being common and received/proposed to be received, commonly for both/ all the premises, (c) c .....

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ctory as the electricity generated in the co-generation power plant is used in the factory only and the surplus electricity is sold to state electricity board, that the premises of sugar mill and its co-generation power plant are interlinked and as such the operation of the sugar mill is dependent upon the electricity generated by the co-generation power plant and the operation of co-generation power plant is dependent upon the supply of bagasse received from the sugar mills, that in view of thi .....

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the power plant, which was not located within the same factory premises of KML Met Ltd. located outside but the electricity generated in the power plant was used in the KMCL, cenvat credit of capital goods used in the power plant would be admissible, that the ratio of this decision of the Tribunal is squarely applicable to the facts of this case, that just because a part of electricity was sold to State Electricity Board, cenvat credit cannot be denied, that Hon ble Chhattisgarh High Court in th .....

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vs. CCE, Hyderabad-2008-TIOL-764-CESTAT-BANG has held that the credit in respect of the capital goods used in the co-generation plant of sugar mill, cannot be denied, even if during the off season period, the power generated is sold to the Andhra Pradesh Electricity Power Grid in terms of the agreement entered into between the sugar mill and the Electricity Board, that as regards the credit in respect of services of installation, erection and commissioning of plant and machinery and repair and .....

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inable. 4. Shri M.S.Negi, the learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that as regard the question as to whether the sugar mill and co-generation power plant are to be treated as one factory in terms of Boards supplementary instruction issued under Rule 31 of Central Excise Rules, 2002 for issue of common central excise registration, the request for common registration of factory premise has been correctly rejected. He pleaded .....

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to whether common registration under Rule 9 of Central Excise Rules, 2002 can be issued to sugar mill and its co-generation power plant which are separated by a public road. In this case, there is no dispute about the fact that the sugar mills and co-generation power plant separated by a public road are connected through overhead conveyer by which bagasse is generated in the sugar mill is transferred to co-generation power plant where it is used in the boiler for generation of steam which is use .....

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factory (where processes are interlinked), but are segregated by public road, canal, or railway-line. In para 3.2 of supplementary instructions examples have been given where two or premises can be treated as part of the same factory and these examples are, (a) interlinked process, (b) products manufactured/produced in one premises are substantially used in other premises for manufacture of final products, (c) large number of raw materials are common and received/proposed to be received commonly .....

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plant where it is used in the boiler for generation of electricity and the electricity generated in the co-generation power plant is used in the sugar mill for its operation and only surplus electricity is sold to the state electricity board and when it is not disputed that administrations/work management of the sugar mill and co-generation power plant is common, the functioning of the sugar mill and its co-generation plant located across the public road has to be treated as interlinked and the .....

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